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Instagram as an E-Marketing Tool Case Study

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Updated: Jun 30th, 2021

Introduction

The arrival of the Internet has revolutionized the marketing space by changing the way businesses reach their potential clients. Specifically, the emergence of social media in 2003-2004 entrenched the concept of e-marketing, which continues to evolve and shape the marketing space. Today, almost all businesses around the world, regardless of the size or location, have digital footprints through the different available social media platforms.

The common and popular platforms include Facebook, Twitter, YouTube, and Instagram with several others competing for a space in a market dominated by the big four. Social media plays a central role in marketing given that over three billion users use the platforms every month.

As a marketing tool, social media helps companies to create brand awareness by reaching out to millions of potential customers with their tailored messages. This aspect allows organizations to increase their customer base, build a reputation, create demand for their products, and ultimately increase revenues. Without social media, businesses would not remain relevant in the highly competitive fast-paced globalized market. In addition, social media is cost-effective because it is cheaper as compared to the traditional way of advertisement and marketing mainly through print media, radio, and television. This paper discusses Instagram as a useful e-marketing tool using the concepts of the marketing mix and PESTLE analysis.

The Concept of Marketing Mix

The marketing mix is a concept used by a business for strategic positioning to satisfy the target market’s needs and achieve its goals and objectives, especially to increase revenues and remain competitive. There are four critical elements, commonly known as the 4Ps – product, place, promotion, and price (Khan, 2014). Marketers focus on each element during designing a marketing strategy to manipulate it and create a mix that will ultimately attract customers and increase revenue. In essence, the success of any business depends largely on the effectiveness of the marketing mix created to create brand awareness.

The first ‘P’ (Product) is the goods and services that companies offer to consumers. The common features associated with products include packaging, brand name, quality, warranties, and other attributes (Al Badi, 2015). The second ‘P’ (Price) is the amount of money that customers have to pay to get a product or service. The pricing approach depends on different factors depending on the nature of the product or service and the target market. This section focuses on place and promotion as key elements of the marketing mix.

Place

In marketing, “place” is termed as the various distribution channels that businesses use to get their products to their customers (Wu & Li, 2018). Therefore, the nature of the product or service determines the appropriate channel of distribution that should be used. “Place” is an important element of a marketing mix because without it, goods and services will not reach the targeted customers, and thus the business will not take place (Išoraitė, 2016).

The term distribution channel is a broad concept that involves other smaller aspects such as warehousing, transportation, and inventory control. In other words, place, as a distribution channel, could be termed as the mechanism through which goods and services move from the producer or manufacturer to the consumers. Therefore, place could be a physical location or virtual stores where goods and services can be availed to customers. The involved players in this channel include retailers, wholesalers, direct sales, and the Internet. All these players have specific roles to play in the physical movement of products and services to consumers.

Promotion

Promotion is the process through which potential customers are made aware of the existence of a business’ goods and services. It involves advertisement and selling of products and services. This element plays an important role in the success of any form of marketing because without it, customers may not know if a certain product or service exists (Nuseir & Madanat, 2015). Promotion activities are geared toward informing and persuading clients to buy products and services. Therefore, it involves creating appealing and convincing messages and using the right channels for the information to reach the target market in its intended form and content.

Advertisements can be done through radio, television, print media, and over the Internet, which has become an indispensable channel of promoting products. Companies can also use other strategies including offering free samples, discounts, peer-to-peer (word of mouth) advertising, leaflets, posters, free gifts and user trial among other similar alternatives. In addition, endorsements by famous people and celebrities are important in promotion because consumers have role models, which could be used to influence consumption and sales. Therefore, both place and promotion are central elements of any form of marketing mix. However, the Internet and the emergence of social media have changed the way companies use these elements as discussed later in this paper.

PESTEL Analysis

PESTEL analysis is a marketing concept and tool that businesses use to assess the macro or external environmental factors that can affect both short-term and long-term operations. The term PESTEL is an acronym standing for physical, economic, social, technological, environmental, and legal factors that should be analyzed to understand the environment under which a business operates (Sridhar, 2016). Political factors cover how governments might influence businesses and to what extent including policies, political stability, foreign trade policy, taxation, and restrictions among other related aspects. Economic factors determine how organizations conduct business and projected levels of growth and profitability (Shtal et al., 2018).

Some of the economic factors include interest rates, consumer’s purchasing power, inflation, exchange rates, and a country’s economic growth status and prospects among other elements. Environmental factors are issues associated with the environment, such as sustainability, pollution, carbon credits, and the availability of raw materials. Legal factors deal with laws and regulations of doing business, patents, advertising standards, and product safety among other related aspects. However, the focus of this paper is technological and social factors as elements of PESTEL.

Technological Factors

In marketing, technological factors are elements pertaining to innovations in technology to promote or hinder advertising and marketing of goods and services. These factors affect marketing in different ways including how goods and services are produced and distributed together with new avenues and strategies for communicating with the target market (Roman, 2015). Understanding technological factors is important because it allows marketers to know how emerging changes in the space might affect marketing either favorably or unfavorably. For instance, in contemporary times where technological evolution is fast-paced with new ways of advertising emerging consistently, it is important to assess how such changes are likely to affect business operations.

Some factors to be considered include incentives, automation, research and development, ease of accessing new technology, innovation levels, technological awareness, the Internet and communication infrastructure, and the life cycle of new technologies. Businesses can use this information to make informed decisions on how to deploy new technology strategically to achieve both long-term and short-term marketing goals (Ho, 2014). For instance, Instagram is becoming a formidable channel of marketing, and thus companies that will not adapt to the changing environment might be locked out of potential markets or lose existing customer base through competition.

Social Factors

These are factors that marketers use to assess the social environment of a market for strategic positioning to ensure that businesses maximize returns from their target markets (Pan, Chen, & Zhan, 2019). Social determinants, such as population demographics, cultural trends, and wealth distribution should be considered when designing a marketing strategy. These factors are important in marketing because they allow marketers to design messages targeting certain characteristics in a given set-up. Generally, social factors focus on human demographics, cultures, and attitudes.

Population size, age distribution, birth and death rates, life expectancy, and marriage and divorce rates could be used to assess how a product will perform the target market. For example, marketing messages targeting aged populations cannot be used in younger populations because the information has to be delivered differently and the two cohorts are likely to prefer varying goods and services. Per capita income, social classes, wealth distribution, and education levels are some other social factors that should be considered in marketing. Companies could use this information to tailor relevant messages that resonate with their target customers.

Instagram as an E-Marketing Tool

Instagram is a revolutionary social media platform that allows users to tell their stories visually through pictures and images. It entered the social media space in 2010 and since then it has grown exponentially to become the second most popular platform after Facebook. Instagram has also become a preferred channel of marketing for businesses owing to its popularity and ease of use (Khan, 2018). The popularity of this platform among users can be attributed to several aspects, such as using visual content to communicate and it is less cluttered as compared to other social media platforms. It is also easy to operate and once a user creates a profile, it serves as the homepage within the platform. For businesses, the profile should be complete with full brand names and appealing pictures to the target audience (Buinac & Lundberg, 2016).

A short bio can be included to let users know more about the brand and a link to the company’s website if it exists. Therefore, Instagram works like any other social media platform in marketing by creating awareness and reaching potential customers.

Instagram and Marketing Mix

Instagram is a robust marketing tool given its large number of users and it can be incorporated in the marketing mix, specifically under place and promotion. As a distribution channel (place), Instagram creates a platform through which customers can access goods and services (Berg & Sterner, 2015).

For instance, through this platform, marketers can create a “call-to-action” button, such as “buy now” “purchase” “message” “call” among others. Through this button, customers can place their orders or interact with the brand in question for more information. Therefore, in essence, Instagram is a distribution channel involved in the movement of goods and services to consumers. In promotion, Instagram plays a central role in creating brand awareness through advertisement. The platform allows businesses to showcase their products and services, build communities, increase brand loyalty, create brand awareness, advertise to potential clients, highlight company values and culture, and share news and updates (Alkhowaiter, 2016).

In other words, given that Instagram can be accessed through smartphones, it means that companies have an opportunity to interact with their target market on the go. Additionally, being a virtual platform it is not limited to space and time, which creates a dynamic environment to keep customers engaged.

Instagram and PESTEL analysis

As discussed earlier, PESTEL analysis helps companies to understand the environment within which they operate. In this case, Instagram is a useful tool when assessing technological and social factors to design a robust marketing strategy. Using sophisticated algorithms, Instagram provides extensive consumer data that companies can leverage to increase sales. For example, through paid adverts, users are in a position to target specific groups of consumers based on certain demographics such as income level, location, age, sex, and tastes and preferences (Virtanen, Björk, & Sjöström, 2017).

Therefore, marketers use this information related to social factors of the targeted users to make informed marketing decisions. This data is also important in understanding the environment within which a company operates. Marketers can leverage such information design marketing content that resonates well with the target market. In addition, as a technological factor of PESTEL, Instagram creates a good communication channel that allows companies to keep their target audience engaged.

The two business concepts – marketing mix and PESTEL analysis are related as they both offer useful insights to markers on how to create and launch successful marketing campaigns. The concepts overlap in their functions in marketing. For instance, marketers using Instagram integrate both of them by using social factors of PESTEL to understand consumer behaviors and other demographics to design relevant promotion (a component of marketing mix) campaigns targeting given consumer groups. Ultimately, PESTEL analysis and marketing mix work in concert to ensure that companies reach the target market, increase revenues, build brand loyalty, and increase profitability among other objectives.

Conclusion

The Internet continues to shape the way companies engage their consumers and Instagram has become part of the most important social media platforms that businesses can use to market their products and services. Marketers use marketing mix to understand how the elements of place, price, promotion, and product can be manipulated to create awareness and ensure that goods and services reach customers for consumption. PESTEL analysis is another concept used to understand the external environment within which companies operate based on political, economic, social, technological, environmental, and legal factors. These two business concepts converge at Instagram as an important e-marketing tool for companies to tailor marketing messages for improved revenues.

Specifically, Instagram has redefined the concepts of place and promotion and marketers can now leverage this technology as a distribution channel and an advertising strategy. In PESTEL, Instagram capitalizes on the sociological and technological elements to provide marketers with rich data that can be used to make informed marketing decisions with maximum returns. The business concepts of marketing mix and PESTEL analysis are interlinked and the different underlying elements overlap with one another in the process of creating functional marketing strategies to ensure that businesses remain relevant in the highly competitive markets.

References

Al Badi, K. S. (2015). The dimensions of marketing mix. Management and Organizational Studies, 2(1), 136-142.

Alkhowaiter, W. (2016). . Web.

Berg, L., & Sterner, L. (2015). . Web.

Buinac, E., & Lundberg, J. (2016). . Web.

Ho, J. (2014). Formulation of a systemic pest analysis for strategic analysis. European Academic Research, 2(5), 6478-6492.

Išoraitė, M. (2016). Marketing mix theoretical aspects. International Journal of Research, 4(6), 25-37.

Khan, M. T. (2014). The concept of ‘marketing mix’ and its elements. International Journal of Information, Business and Management, 6(2), 95-107.

Khan, S. (2018). Instagram as a marketing tool for luxury brands. International Journal of Management and Business Research, 8(2), 120-126.

Nuseir, M. T., & Madanat, H. (2015). 4Ps: A strategy to secure customers’ loyalty via customer satisfaction. International Journal of Marketing Studies, 7(4), 78-87.

Pan, W., Chen, L., and Zhan, W. (2019). PESTEL analysis of construction productivity enhancement strategies: A case study of three economies. Journal of Management in Engineering, 35(1), 1-40.

Roman, A. (2015). An integrated strategy framework (ISF) for combining Porter’s 5-Forces, Diamond, PESTEL, and SWOT analysis. Open Science, 4(1), 21-26.

Shtal, T. V., Buriak, M., Amirbekuly, Ukubassova, G., Kaskin, T., & Toiboldinova, Z. (2018). Methods of analysis of the external environment of business activities. Revista Espacios, 39(12), 22-31.

Sridhar, R., Sachithanandam, V., Mageswaran, T., Purvaja, R., Ramesh, R., Senthil Vel, A., & Thirunavukkarasu, E. (2016). A political, economic, social, technological, legal and environmental (PESTLE) approach for assessment of coastal zone management practice in India. International Review of Public Administration, 21(3), 216-232.

Virtanen, H., Björk, P., & Sjöström, E. (2017). Follow for follow: Marketing of a start-up company on Instagram. Journal of Small Businesses and Enterprise Development, 24(3), 1-21.

Wu, Y.-W., & Li, E. Y. (2018). Marketing mix, customer value, and customer loyalty in social commerce: A stimulus-organism-response perspective. Internet Research, 28(1), 74-104.

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IvyPanda. 2021. "Instagram as an E-Marketing Tool." June 30, 2021. https://ivypanda.com/essays/instagram-as-an-e-marketing-tool/.

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